A new pricing system approved Wednesday by Maryland’s largest water utility will result in lower water and sewer bills for larger households in the Washington suburbs and higher bills for residents who live alone, the utility said.
When the changes take effect in July 2019, a three-person home — the most common-sized household — using an average amount of water will see their quarterly bill drop by about $5, according to the Washington Suburban Sanitary Commission (WSSC). A nine-person home will pay an average of about $80 less per quarter.
People living alone will pay an average $8 more per quarter, WSSC officials said.
The changes came in response to a 2017 ruling by the Maryland Public Service Commission that found WSSC’s 25-year-old rate structure — thought to be unique among U.S. water utilities — is “unduly discriminatory” and “unreasonable” because it can require larger households to pay more per gallon.
The new system also comes as WSSC and other U.S. water utilities struggle to replace billions of dollars worth of pipes and other aging infrastructure even as customers use — and pay for — less water per capita because of low-flow toilets, faucets and appliances.
“I think we’re all confident that [the new pricing system] addresses our priorities,” said T. Eloise Foster, chair of WSSC’s board. “Some lower-volume users are going to experience an increase in their bills, but I think overall and most importantly, quarterly bills for the typical household of three people are going to be lower.”
Like many water utilities, WSSC tries to encourage water conservation by charging higher rates as customers use more. However, industry experts say WSSC is unique in charging the highest rate for the entire quarterly bill, back to the first drop. Other utilities charge more only for the number of gallons that bump into each higher-priced tier.
The result: Homes with three or more people can be charged nearly twice as much per 1,000 gallons as single-person households, according to Richard D. Boltuck, a Bethesda resident and retired economist who filed the original complaint about the pricing structure with the state commission in 2015. A seven-person household, Boltuck said, can end up paying $1,314 more annually than if those seven people each lived alone.
WSSC serves 1.8 million residents and businesses in Montgomery and Prince George’s counties.
Under the new system, customers will be charged via four pricing tiers, down from 16, and will pay more only for the number of gallons that bump into each higher-priced tier.
WSSC officials said they expect to collect about the same amount of money overall, but the utility’s revenue stream will become more stable as customers’ bills become less volatile.
Tiered per-gallon rates, WSSC officials said, will continue to incentivize people to use less water, as guided by state law. WSSC spokesman Chuck Brown said the utility also rejected a flat rate because it would have sent some bills 20 percent higher, which was considered too onerous for low-income residents and those on fixed incomes.
Thomasina Rogers, a WSSC commissioner, said the board heard a “barrage of complaints” during numerous public hearings from residents worried about having to pay more.
“The [bills] are going to go up for those lower-end users, but there’s a reason for it,” Rogers said Tuesday during a pre-vote meeting.
Boltuck said the new rate structure remains “highly discriminatory” because it will continue to charge more per gallon as customers use more. Boltuck said a flat rate would be the most fair. Otherwise, he said, larger households end up subsidizing smaller households simply because they use more water.
His analysis of the new pricing system, he said, found that a family of seven will still have to pay about 54 percent more per gallon than if those seven people each lived alone.
“You can just have more people consuming water,” Boltuck said. “That’s not the fault of the larger households. They’re just being discriminated against.”
Boltuck said he needs to analyze the new pricing system before deciding whether he thinks it’s still “unreasonably” discriminatory under the state ruling. If necessary, he said, he’ll take his complaint back to the Maryland Public Service Commission.